FTSE 100 posts 5th drop in a row after U.K. budget outlined

U.K. stocks ended a highly volatile session slightly lower on Wednesday after the British government laid out plans for spending and taxes as it works to exit from the European Union.

The FTSE 100
UKX, -0.61%
ended roughly 0.1% lower at 7,334.61 for a fifth straight session of losses. That marked the longest losing run for the index since early November.

Budget: U.K. Treasury chief Philip Hammond outlined the last budget before the U.K. begins its flight out of the European Union. He said the 2017 forecast for British economic growth was upgraded, to 2% from a previous estimate of 1.4%. But growth is expected to slow in 2018.

The budget included a reduction in the tax-free dividend allowance to £2,000 ($2,430) from £5,000, and a two-tier sugar tax levy. Soft drinks producers A.G. Barr PLC
BAG, -0.15%
and Britvic PLC
BVIC, +0.00%
lost 1.3% and 0.8%, respectively.

Hammond also said there will be a £1,000 discount for pubs on business rates, which should affect 90% of pubs in Britain. Shares of Punch Taverns PLC
PUB, +0.99%
rose 0.9%, but Greene King PLC
GNK, -0.53%
gave up 0.2%.

“It’s very much a steady-as-she-goes budget for a country that’s about to embark on a very tricky two years,” as Brexit is negotiated, said IG’s chief market analyst Chris Beauchamp.

“Borrowing is going to be down and it’s presuming a better outlook for the government on that front. Of course, you worry about whether everything will be quite as strong given Brexit. But certainly the mood music there is strong for the pound,” he said.

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